Gold prices have soared to the $3,200 mark, as predicted by many experts. Over the past two years, the prices of precious metals have steadily risen, finally reaching a new price milestone.
Since mid-2023, the price of gold has surged from around $1,800 per ounce to nearly $3,100 currently, showing a remarkable increase of 72%. Patti Brennan, CEO of Key Financial, stated, “Gold had a strong performance in 2024 and is performing well this year, even surpassing the S&P 500.”
Gold has always been seen as a safe-haven asset, highly favored during times of economic turmoil. The growth in demand from China has reignited the momentum for gold, with the London benchmark price briefly dipping earlier this week before rebounding, breaking through the $3,200 per ounce mark and hitting a historic high of $3,243.82 on Friday, April 11.
However, the continuous surge in gold prices may not last forever, as the current high costs will significantly impact investors. Are you already holding gold or considering a purchase? Here are the key points regarding the recent price milestones of gold.
For investors who already hold gold in their portfolios, the new price points may spark excitement and even thoughts of selling, depending on how much the price has increased since their purchase. However, is it advisable to do so?
James Cordier, CEO and chief trader at Alternative Options, told CBS News, “It entirely depends on the initial purpose of investors buying the precious metal.”
If the goal is to gain some returns and immediately need the funds for a specific purpose, selling now might be a wise move. However, if the objective is long-term wealth security, inflation hedging, portfolio diversification, or other macroeconomic benefits, continuing to hold gold might be the best choice.
Steve Wilbourn, a financial advisor at True North Advisors, mentioned to CBS, “Most gold investors do not engage in daily trading of this asset.”
He added, “It’s more of a buy-and-hold investment because it’s a highly volatile asset with constantly changing prices.”
While gold prices have reached historic highs, it does not necessarily mean they have peaked. In fact, many experts believe that gold prices will continue to rise in the foreseeable future.
Cordier stated, “There are many factors driving gold prices to record highs, but the main catalyst is central bank buying.” He added, “In recent years, as central banks around the world continue to increase their gold holdings at a record pace, gold is being accumulated regardless of price, a situation that has not been seen recently.”
Cordier believes that by the end of this year, gold prices could rise another 10%, reaching around $3,500 per ounce.
Wilbourn noted, “I anticipate that by the end of 2025, gold prices will rise by several hundred points, as central banks are actively increasing their gold reserves, indicating strong demand.”
“Now is the time to buy, not sell,” Wilbourn expressed, “Gold is often more like a collectible item; the longer you hold it, the higher its value.”
Remember, the potential price increase is not the only benefit of holding gold; many use it to hedge against inflation or diversify their investment portfolios.
“New investors should not be afraid of gold reaching new highs,” Wilbourn advised, “Physical assets like gold are becoming a reasonable investment to hedge against stock and bond risks. With the recent poor performance of the bond market, commodities and physical assets are good choices for supplementing risk hedging in the market.”
Wilbourn recommended allocating around 5% to 10% of funds in the investment portfolio to purchase gold. He stated, “This is a reasonable proportion to help achieve diversification in the investment portfolio.”
In conclusion, if unsure whether investing in gold is suitable for an investor’s portfolio or needing help in deciding how best to buy gold, consulting a financial or investment advisor is recommended. There are various ways to invest in gold nowadays, including physical gold, Gold IRA accounts, Gold Exchange-Traded Funds (ETFs), etc. Professionals can assist investors in making the right investment decisions based on their goals and budgets.
(This article is for general informational purposes only, with no recommendation intended. The Epoch Times does not provide investment, tax, legal, financial planning, estate planning, or other personal financial advice. For specific investment matters, consult your financial advisor. The Epoch Times does not assume any investment responsibility.)